Securities Report - 226th Fiscal Period (2025/04/01 - 2026/03/31)

Tokyo Gas Co., Ltd. Securities Report - 226th Fiscal Period (2025/04/01 - 2026/03/31)

The company aims to ensure stable energy supply and realize a sustainable society, primarily through its core urban gas supply business. This report discloses management status, financial condition, performance trends, and future outlook for the 226th fiscal period, in accordance with the Financial Instruments and Exchange Act.

Management Policy and Strategy

The company has positioned "achieving carbon neutrality" and "advancing digital transformation (DX)" as core elements of its medium-term management plan. It is expanding the introduction of renewable energy, commercializing hydrogen and ammonia fuels, and leveraging data through full deployment of smart meters. Additionally, by strengthening integration with power and heat supply businesses, it is reinforcing its foundation as a comprehensive energy provider capable of meeting diverse energy demands.

Overview of Financial Condition

As of the end of the previous consolidated fiscal year (March 31, 2025), total assets amounted to 7.824 trillion yen, net assets to 2.315 trillion yen, and total liabilities to 5.509 trillion yen. The equity ratio remained stable at 29.6%. The average remaining maturity of interest-bearing debt is 6.8 years, reflecting prudent management of interest rate fluctuation risks.

Performance Trends

For the 225th fiscal period, consolidated net sales were 3.241 trillion yen, operating profit was 218 billion yen, and net income was 142 billion yen. Despite challenges from high energy prices and exchange rate fluctuations, the company stabilized earnings through demand-supply adjustments and cost structure reviews.

Future Outlook

For the 226th fiscal period, the company forecasts net sales of 3.3 trillion yen, operating profit of 230 billion yen, and net income of 150 billion yen. Growth is particularly expected in non-gas businesses (retail electricity, energy management services, hydrogen-related ventures), contributing to diversified revenue streams.

Environmental, Social, and Governance (ESG) Initiatives

The company has declared its goal of achieving carbon neutrality by 2050 and aims to reduce CO2 emissions by 40% by 2030 compared to fiscal year 2013 levels. It plans to increase the proportion of electricity sourced from renewables to over 50% by 2030 and commercialize hydrogen co-firing technology by the 2026 fiscal year.

Risk Factors

Key risks include fluctuations in international energy prices, exchange rate volatility, demand variations due to climate change, regulatory changes, and cybersecurity threats. To mitigate these, the company is enhancing hedging strategies, revising its business continuity plans (BCP), and strengthening monitoring systems.

Shareholder Return Policy

To balance sustainable growth with shareholder value enhancement, the company maintains a policy of stable dividends. The annual dividend for the 226th fiscal period is expected to be 95 yen per share, with a dividend payout ratio projected in the late 30s percentage range.

Geographic Business Expansion

While the primary service area remains Tokyo's 23 wards and surrounding municipalities, the company is expanding its retail electricity and energy management services nationwide, enhancing solutions for corporate clients.

Key Future Investment Areas

Priority investment areas include strengthening digital infrastructure, capital expenditures for hydrogen and ammonia integration, and participation in smart city collaboration projects. The company plans cumulative investments of approximately 400 billion yen by the 2026 fiscal year.

Talent Development and Workstyle Reform

The company is promoting diverse recruitment and talent development, targeting a female managerial ratio of over 30% by 2030. It is also advancing the adoption of DX tools to support remote work and improve productivity.

Customer Service Enhancement

Through 24/7 AI chatbot support, smartphone app-based energy usage visualization, and anomaly detection features, the company ensures both convenience and safety for customers.

Future Challenges and Outlook

To respond to evolving energy supply and demand dynamics, optimizing supply-demand balance, adopting energy storage technologies, and promoting regional energy collaboration are critical. As a leader in societal energy transition, the company will continue to drive transformation.